Camden Property Trust — Q1 2021 Form 10-Q
Reporting period: Three months ended March 31, 2021. Camden is a U.S. multifamily REIT. At quarter-end it owned interests in, operated, or was developing 175 apartment properties with 59,459 homes; eight properties with 2,608 homes were under construction.
Financial performance and position
- Revenue: Property revenue was $267.6 million, up 0.6% from $265.9 million a year earlier. Same-store revenue declined 0.4%.
- Property operations: Property expenses rose 7.2% to $100.9 million. Property NOI was $166.6 million, down 3.0%; same-store NOI fell 3.5% to $150.5 million. Weighted average occupancy was 95.9%, unchanged year over year.
- Profit: Net income was $32.5 million versus $44.5 million; net income attributable to common shareholders was $31.3 million versus $43.3 million. Diluted EPS was $0.31 versus $0.43. Management cited lower property operations, higher interest, depreciation and G&A expenses, and lower fee income.
- REIT measures: FFO was $125.8 million versus $136.3 million; AFFO was $113.1 million versus $121.5 million. These are non-GAAP measures.
- Cash flow: Operating cash flow was $88.5 million, down from $110.6 million. Investing cash outflow was $92.1 million, primarily for development and capital improvements; financing cash outflow was $83.4 million, primarily distributions. Cash and cash equivalents were $333.4 million at quarter-end, versus $420.4 million at year-end 2020.
- Debt and liquidity: Unsecured notes payable totaled $3.168 billion. Weighted average debt maturity was 8.2 years and weighted average interest rate was 3.6%. Camden had no credit-facility borrowings, $12.2 million of letters of credit, and $887.8 million available under its $900 million facility. All consolidated properties were unencumbered. Interest coverage was 6.2x versus 7.8x.
- Distributions: The company declared a quarterly dividend of $0.83 per share. If maintained through the rest of 2021, the annualized rate would be $3.32 per share.
Changes and management commentary
- Same-store revenue pressure reflected lower average rental rates and higher uncollectible revenue. Same-store expenses increased mainly due to real estate taxes, utilities, insurance, and repairs and maintenance.
- Interest expense rose $3.9 million, primarily due to debt issued in 2020 and a $40 million floating-rate term loan. Development completions also contributed to higher depreciation.
- Deferred compensation plan investment income and expense each changed by $18.5 million year over year and offset each other; these volatile, matched items affected reported income and expenses but not operating NOI.
- Camden collected approximately 98.4% of scheduled Q1 rents; 1.6% was delinquent. As of April 25, approximately 98.0% of April scheduled rents had been collected and 2.0% was delinquent.
- Management said the pandemic’s future impact remains uncertain and may affect rents, collections, expenses, project timing, and construction costs. It expects to preserve financial flexibility and believes liquidity is sufficient for reasonably anticipated needs over the next 12 months. The filing does not provide formal earnings guidance.
Outlook, commitments, and risks
- Estimated remaining cost to complete the eight projects under construction was $357.9 million. Management expected to spend $185–$200 million of this during the remainder of 2021. Additional anticipated 2021 spending included $60–$64 million for repositions and revenue-enhancing work, $22–$28 million to start new developments, and $57–$60 million for recurring capital expenditures.
- Management identified pandemic-related rent collection and eviction restrictions, market and rent volatility, construction delays and cost inflation, higher interest rates, refinancing and credit-market access, significant debt, joint-venture exposure, and potential impairment as risks. No impairment charges were recorded in Q1; management noted future market deterioration or changes in development plans could require material charges.
- Unconsolidated joint ventures had $512.5 million of third-party debt; Camden reported no guarantees of that debt. No legal proceedings were reported, and the filing stated there were no material changes to previously disclosed risk factors.
- There were no Q1 sales under the ATM program or share repurchases. Up to $362.7 million remained available under the ATM program. The company reported compliance with its credit-facility covenants.
Key facts for investors to verify
- Whether rent collections, delinquencies, average rental rates, and same-store NOI improve or weaken in subsequent quarters.
- Whether expense growth—especially real estate taxes, utilities, insurance, and maintenance—continues to outpace revenue growth.
- Progress, lease-up, timing, and final costs for the eight developments and the $357.9 million remaining construction commitment.
- Debt maturities and refinancing plans, interest coverage, credit ratings, and access to the revolving facility and capital markets.
- Whether the stated liquidity outlook remains adequate as development spending and dividends continue, and whether Camden uses the ATM program.